Procedures for capital mobilization and credit granting activities of the Cooperative Bank

What are the current capital mobilization and credit granting activities of the Cooperative Bank? What is the organizational structure of a cooperative bank?

1. Regulations on procedures for capital mobilization and credit granting activities of Cooperative Banks

Pursuant to Article 117 of the Law on Credit Institutions 2010, regulations on the activities of cooperative banks are as follows:

– The main activities of cooperative banks are to regulate capital and carry out banking activities for members who are private credit funds. people.

– Cooperative banks are allowed to carry out a number of banking activities and other business activities according to the provisions of Section 2, Chapter IV of this Law after receiving written approval from the State Bank.

2. What is the organizational structure of cooperative banks?

Pursuant to Article 75 of the Law on Credit Institutions 2010 (amended by Clause 17, Article 1 of the Law on Credit Institutions Amended 2017) stipulates the following organizational structure:

– The organizational and management structure of cooperative banks and people’s credit funds includes including the General Meeting of Members, Board of Directors, Supervisory Board, General Director (Director).

– Chairman and other members of the Board of Directors, Head and other members of the Supervisory Board, General Director (Director) of cooperative banks, people’s credit funds must meet the standards of professional qualifications, professional ethics, understanding of banking operations according to regulations of the State Bank and must be on the list approved by the Bank. approved by the State Bank.

The State Bank shall specify procedures and documents for approval of the proposed list of election and appointment of positions specified in this Clause.

– Cooperative banks and people’s credit funds must have internal audits, internal control systems and carry out independent audits according to the regulations of the State Bank.

3. What are the conditions for granting a cooperative bank license?

Pursuant to Article 8 of Circular 31/2012/TT-NHNN stipulating the conditions for granting a cooperative bank license as follows:

– Having a minimum charter capital equal to the legal capital according to the Government’s regulations at the time of request for establishment.

– Members Members who are people’s credit funds and other legal entities must meet the regulations in Article 34 of this Circular.

– Managers, executives and members of the Supervisory Board must meet all standards and conditions as prescribed in the Law on Credit Institutions and Articles 23, 24 and 25 of this Circular.

– Have a Charter in accordance with the provisions of the Law on Credit Institutions and the Law on Cooperation. Commune and other relevant legal regulations.

– Have an establishment plan and a feasible business plan for the first 3 (three) years of operation.

4. What are the license application documents?

Pursuant to Article 9 of Circular 31/2012/TT-NHNN stipulating the license application documents as follows:

– License application document signed by the Chairman of the Board of Directors of the cooperative bank expected to be established (Appendix No. 03 to this Circular).

– Charter of the cooperative bank.

– Proposal for establishing a cooperative bank, which clearly states:

+ The necessity of establishing a cooperative bank;

+ Name of the cooperative bank, location of head office, term of operation, charter capital upon establishment, content of operations in accordance with regulations stipulated in the Law on Credit Institutions and this Circular.

+ Capital contribution structure of members, clearly stating that members contribute capital of 05% or more of charter capital;

+ Expected organizational structure and personnel:

– Personnel organization chart;

– Administration and control apparatus control and administration, including:

+ Board of Directors: Chairman, member of the Board of Directors;

+ Supervisory Board: Head, member of the Supervisory Board, member of the Supervisory Board, full-time;

+ General Director, Deputy General Directors, Chief Accountant, Branch Director and equivalent positions as prescribed in the Cooperative Bank Charter;

+ Risk management capacity: Types of risks expected to arise during operations (credit risk, operational risk, market risk, liquidity risk…) and measures to prevent and control these types of risks this risk;

+ Information technology:

– Expected financial investment in information technology;

– Ability and application of information technology, clearly stating: time to implement technology investment; type of technology expected to be applied; expected staff and staff’s ability to apply information technology; ensure the information system can integrate and connect with the State Bank’s management system to provide information according to the State Bank’s management requirements;

+ Development strategy, expansion of operational network, provision and development of banking services (clear analysis of services expected to be provided, types of customers…);

+ Internal control and audit system set:

– Operating principles of the internal control and audit system;

– Internal regulations according to the provisions of Clause 2, Article 93 of the Law on credit institutions.

+ Expected business plan for the first 03 years, at least must include: Expected business results, minimum capital adequacy criteria, and other criteria on operational efficiency and explanation of the ability to implement the plan in each year.

– Profiles of people expected to participate in management, control and administration:

+ List of personnel expected to participate in management, control and administration;

+ Resumes (Appendix No. 01 to this Circular), criminal records according to the provisions of law law;

+ Copy of ID card or passport or other legal personal identification;

+ Publicly report related interests as prescribed in Article 118 of the Law on Enterprises;

+ Copy of diplomas proving professional qualifications.

– Member profile:

+ List of members contributing capital to the cooperative bank, including the following main contents:

– Name and location of head office; Establishment license or Business registration certificate; capital contribution amount, capital contribution ratio, capital contribution period;

– Full name; permanent address; nationality; number, date of issue, place of issuance of ID card or passport or other legal personal identification for individuals who are representatives of contributed capital;

+ Application for membership in cooperative banks;

+ Establishment license or Business registration certificate or equivalent document (for legal entities that are not credit institutions);

+ Document Written approval from the competent authority for organizations (except people’s credit funds) to contribute capital to establish a cooperative bank (if any);

+ Charter (for legal entities other than credit institutions)

+ Document authorizing the legal representative (including the capital contribution representative) to participate as a member at the cooperative bank according to the provisions of law;

+ ID card or passport or legal personal identification of the person authorized to legally represent the legal entity other than a credit institution contributing capital to the cooperative bank;

+ Declaration of related persons of the member other than the people’s credit fund (Appendix No. 02 to this Circular);

+ Financial statements for the year immediately preceding the current year Proposal to establish a cooperative bank and Financial statements up to the latest date but not more than 90 days back from the time of the written request for capital contribution (for legal entities other than credit institutions);

+ Declaration clearly stating the capital contribution, number of shares held, and share ratio of each member at another credit institution.

– Document confirming ownership or rights legally use the location of the head office.

– Resolution of the first Congress of members on the establishment of a cooperative bank.

– Resolution of the first Members’ Congress on electing the positions of Chairman and members of the Board of Directors, Head and members of the Supervisory Board.

– Decision of the Board of Directors on appointing the position of General Director of the cooperative bank.

However, in terms of procedures for capital mobilization and credit granting activities, the Board currently Support cannot be reviewed.